Coronavirus Is Coming for the Global Economy

Ghost towns, flight cancellations, and closed factories.
February 24, 2020, 6:39pm
Commuters ride an empty carriage of a tram in Milan, Italy, on Monday, Feb. 24, 2020. Stunned by Europe's biggest surge of the coronavirus, Italy appears to be operating in near panic mode.

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The coronavirus has started to infect the global economy.

Towns have become almost entirely deserted as far away from Wuhan, China, where the virus was first detected, as Russia and Italy. In London, a boutique owner can’t hasn’t been able to source hair extensions from China, according to CNN. Another business owner in the U.S. can’t import her arts and craft supplies either, according to CNBC.

As the death toll ticks up in Italy, the epicenter of the outbreak in Europe, the markets tanked: European markets slumped between 3% and nearly 6% on Monday, and economists have warned that Japan and Germany — the third and fourth largest economies in the world, respectively — could both be on the brink of recession.

The U.S. market is also feeling the effects of the virus: Last week, the Dow was breaking record highs last week; on Monday, the U.S. markets all dropped by about 3%.

The World Health Organization has yet to declare the coronavirus outbreak a pandemic, but more than 2,500 have died from the virus all around the world. Six people are dead in Italy from the virus, and confirmed cases there tripled over the weekend. The number of new cases there continued to tick up hourly on Monday. Confirmed cases in South Korea on Monday ticked up to 833 confirmed cases.

The vast majority of the 80,000 coronavirus cases were infected in mainland China, where factories have been forced to close because workers aren’t showing up. That, along with thousands of flight cancellations, has led to a dip in global oil demand for the first time in a decade.

The outbreak is also creating ghost towns around the world. In Codogno, Italy, southeast of Milan, the streets are empty. "People are locked in their houses, there's nobody in the streets," a woman named Paola told Agence-France Presse.

The same is true in Daegu, South Korea, where the number of reported cases tripled over the weekend. “Things are beyond quiet here,” Daegu resident Kim Tae-woo told the Guardian. “It feels like I’m at a meditation center.”

In the Russian city of Blagoveshchensk, on the border with China, not a single case of coronavirus has been confirmed. But Russia closed the border with China, and Blogoveshchensk, which staked its future on a closer economic relationship with China, has ground to a halt.

The virus’s outbreak is affecting unexpected corners of the global economy, too. Chinese Lunar New Year celebrations, which tend to involve tons of seafood, usually mean a boom for fishermen in the Torres Straight, off the northern coast of Australia. But China cancelled the annual festivities this year in hopes of containing the epidemic.

“Most of the fishermen have stopped going out now, because it seems like you can’t make any money because of what’s going on,” Boggo Billy, who usually sends his sea cucumbers and rock lobsters to markets in China, told the Guardian.

If there’s any bright side to any of this, it might be that greenhouse gas emissions are dipping because of the coronavirus, too. China’s emissions are expected to dip by about 25% in the first quarter of 2020.

Cover: Commuters ride an empty carriage of a tram in Milan, Italy, on Monday, Feb. 24, 2020. Stunned by Europe's biggest surge of the coronavirus, Italy appears to be operating in near panic mode. Photographer: Francesca Volpi/Bloomberg via Getty Images